The Department of Defense proposes to revise its rule on Transactions Other Than Contracts, Grants, or Cooperative Agreements for Prototype Projects in order to reflect changes in 10 U.S.C. 4022 and its predecessor authorities. Other Transactions (OTs) for prototype projects are legally binding agreements that serve as alternatives to traditional Government procurement contracts and provide authority for broad flexibility in terms of the award process and the terms and conditions for the project. The proposed changes broaden use and revise procedures including:  provide authority for follow-on production OTs and contracts; special circumstances for award of OTs to small businesses, nontraditional defense contractors, nonprofit research institutions, and consortia; add approval requirements for large dollar OTs; provide authority to supply prototypes and production items as Government furnished items; and apply procurement ethics requirements to section 4022.